Social Security Benefit Statements Mailed: How Did You Fare?

Dec. 5, 2024 – The mail arrived this week and there were our Social Security benefit statements, right when promised. With a modest COLA for 2026 in the offing, we expected to see a small increase in our 2026 benefit.

Not everyone’s situation will be the same

The cost of living adjustment (COLA) for 2026 is 2.8%. That’s about $56 on the average monthly Social Security benefit of just over $2,000. People who have higher earning records would see more dollars from that COLA – someone with a $4000 monthly benefit would get a $112 bump.

The standard Part B Medicare premium goes from $185 in 2025 to $202.90 in 2026. That is a $17.90 increase (9.6%). So someone with the average monthly benefit nets $38.10/month more in 2026 than in 2025, which reduces the net COLA to a 1.9% increase. Sadly, about half the rate of inflation in the U.S.

The problem for some taxpayers (a happy one in the big picture) is that their Modified Adjusted Gross Income might go over the married filing jointly threshold of $218,000. That triggers bigger IRMAA supplements for Parts B and D., or $202.90 in additional Medicare premiums. If someone goes from being under the MAGI threshold one year to over the next, that will more than wipe out any net gain from the SS COLA. Their net 2026 SS benefit will be less than in 2025. People with even higher MAGI will pay even more extra.

A problem for high earners

As we mentioned this is a happy problem – no one over that threshold should be complaining too hard. For anyone with incomes that strong the monthly surcharge is peanuts. But, surprisingly, it is relatively easy for someone with a big pension or SS benefit, and who has substantial retirement savings to go over the MAGI threshold. The problem is that just about all income gets put into MAGI calculations – tax free interest, IRA and 401(k) withdrawals, capital gains, and dividends. Ordinarily these are either not taxed or at a lower rate.

When that MAGI threshold gets triggered following a year when the taxpayer was under it, one can expect that their net Social Security benefit will be lower in the new year. The extra premium will more than consume and COLA. Some taxpayers have strategies to try to keep their MAGI below the trigger point.

Comments: Did you get your benefit statement in the mail? Were you surprised by what you will get in 2026 – for the good or bad. Please share your thoughts in the Comments section below.